This document analyzes the impact of rice imports on domestic rice production in Nigeria. It finds that Nigeria accounts for over 50% of rice production in West Africa but still relies heavily on rice imports to meet domestic demand. Domestic rice production costs are high, making local rice uncompetitive with imported rice. While government policies have aimed to promote self-sufficiency, rice imports continue to dominate the market and outcompete local producers. Improving yields, quality standards, processing efficiency and reducing costs will be needed for domestic rice to become competitive.

2. Impact of Trade on Domestic Rice
Production and the challenge of Self-
sufficiency in Nigeria
Chuma Ezedinma
Integrated Cassava Project
International Institute of TropicalInternational Institute of Tropical
AgricultureAgriculture

3. Rice Paddy Production (Mt)' by Proportion
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Nigeria 51.5 52.2 50.8 44.7 48.0 44.5 44.1 43.9 43.3 44.0 38.0 43.6
Benin 0.2 0.2 0.2 0.3 0.3 0.3 0.4 0.5 0.4 0.7 0.8 0.9
Burkina Faso 0.6 0.7 0.9 1.1 1.4 1.6 1.2 1.2 1.2 1.4 1.5 1.2
Cameroon 0.6 0.8 0.5 0.7 0.6 0.5 0.5 0.7 0.9 0.8 0.9 0.8
Chad 1.9 1.7 0.4 1.7 1.3 1.4 1.5 1.6 1.8 1.2 1.5 1.6
Cote d' Ivoire 10.5 10.6 11.2 12.9 12.6 16.2 17.4 16.0 16.0 16.4 16.7 11.2
The Gambia 0.3 0.3 0.2 0.4 0.3 0.3 0.2 0.3 0.4 0.5 0.4 0.3
Ghana 2.4 2.1 2.6 3.0 3.3 3.1 2.7 2.6 2.8 3.3 3.8 3.8
Guinea 8.0 8.2 8.8 10.0 10.4 9.6 9.7 10.2 10.8 9.9 10.9 11.5
Guinea-Bissua 2.0 2.0 2.1 2.4 2.2 1.7 1.4 1.2 1.1 1.4 1.2 1.1
Liberia 1.6 1.8 1.1 0.9 0.9 1.3 2.3 2.8 2.6 2.4 2.0 2.6
Mali 7.3 6.6 7.1 8.6 7.8 8.9 7.8 9.6 9.6 9.9 12.9 12.7
Mauritania 0.7 0.8 1.1 0.8 0.9 1.0 1.1 1.4 0.7 1.0 0.9 0.9
Niger 1.2 1.1 1.2 1.1 0.8 0.7 0.8 0.8 0.8 0.8 1.1 1.0
Senegal 2.7 2.8 3.2 3.0 2.6 2.1 2.3 1.7 3.2 2.7 3.4 2.4
Sierra Leone 8.0 7.7 8.1 7.5 5.8 5.6 5.6 4.4 3.3 2.7 3.2 3.4
Togo 0.6 0.4 0.6 0.9 0.8 1.1 1.2 1.2 1.1 0.8 0.9 0.9
Total 100 100 100 100 100 100 100 100 100 100 100 100
• Nigeria is the largest rice producing country in the West African region.
• By 2002, the country accounted for 57 % of the total rice producing area in
West Africa.
• Potential land area for rice production in Nigeria is between 4.6 million and
4.9 million ha.
• Out of this, only about 35 percent of available land area is cropped to rice.
• Rice yields are however low even by West African Standards
Introduction

4. The Paradox
 Nigeria is the largest importer of rice in the world
 The annual demand for rice in the country is estimated at 5 million tons
 Domestic production accounts for 3 million tons
 Imports account for about 2 million tons
 Between 1990 and 2002, Nigeria imported 5,132,616 tons of rice
 In 2002 alone, the country imported 1.882 million tons of rice.
Value of rice imports ('000US$)
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
1
9
6
1
1
9
6
3
1
9
6
5
1
9
6
7
1
9
6
9
1
9
7
1
1
9
7
3
1
9
7
5
1
9
7
7
1
9
7
9
1
9
8
1
1
9
8
3
1
9
8
5
1
9
8
7
1
9
8
9
1
9
9
1
1
9
9
3
1
9
9
5
1
9
9
7
1
9
9
9
2
0
0
1
Year
US$

5. Objectives
 Describe the effect of rice trade (imports) on domestic rice
production and marketing
 Assess the competitiveness of domestic rice relative to
imported rice in Nigeria
 Assess the effect of policy inconsistency on rice production
 Determine the optimal efficiency of local rice mills

6. Primary sources:
Field level survey involving small scale
mills, rural and urban markets in north and
south of Nigeria
Secondary sources:
IITA and other Libraries, internet
Methodology

7. Rice Production Systems
In Nigeria, cultivable land to rice is spread over five ecologies, namely:
 rain fed upland
 rain fed lowland or shallow swamp
 irrigated rice
 deepwater or floating rice and
 tidal mangrove swamp
Rice production features and systems in Nigeria
17%
52%
27%
3% 1%
Rained Upland
Rained Lowland
Irrigated
Deep Water Floating
Mangrove Swamp

8. Major Rice producing
States:
Kaduna - 22 %,
Niger - 16%
Benue - 10%
Taraba - 7%
In geopolitical terms rice is produced mainly in the central region of Nigeria
Rice Output in Nigeria by Zones (2000)
23%
15%
47%
10%
5%
Northwest
Northeast
Northcentral
Southeast
Southwest

9. Effect of rice trade (imports) on domestic rice production and marketing
The proportion of local rice available in Nigerian markets is far less than that
of imported rice
Table: Market share of foreign rice to local rice in selected urban markets.
Urban
market
Local rice
volume (tons)
Foreign rice
volume (tons)
Total volume
(tons)
Percent of
foreign rice
Enugu 2270.00 5935.80 8205.80 72.33
Umuahia 417.00 14202.90 14619.90 97.14
Owerri 1786.90 15493.40 17280.30 89.60
Uyo 290.70 887.00 1177.70 75.53
Port Harcourt 442.90 26306.50 26749.40 98.34
Onitsha 4284.90 157600.00 161884.90 97.35
Calabar 321.00 790.10 1111.10 71.11
Aba 847.97 23177.10 24025.07 96.47
Source: Field survey, 2001.

10. Effect of rice trade (imports) on domestic rice production and marketing
Capacity utilisation in selected rice processing mills
Location Capacityutilisation (%)
Abakiliki 7.06
Afikpo 40.27
Adani 20.46
Omor 60.36
Ogoja 8.89
Bende 5.41
• The small rice processing mills are the most dominant in Nigeria
• Low effective capacity utilisation in small rice mills
Three types of rice
processing mills
Traditional/hand
Small rice mills
Large rice mills

11. Effect of rice trade (imports) on domestic rice production and marketing
Nassarawa
Afikpo
Abakaliki
Adani
Benue
Gombe
Taraba
20%30%
15%
30%
15%
30%
20%
15%
Figure External sources of paddy rice to Abakaliki, Adani and Afikpo rice mills.
Loss of rural farm labour to urban migration
Rise in intra regional trade

12. Effect of rice imports on domestic production
Growth rate of Rice Production in Nigeria
-500000
-400000
-300000
-200000
-100000
0
100000
200000
300000
400000
1
9
6
2
1
9
6
8
1
9
7
4
1
9
8
0
1
9
8
6
1
9
9
2
1
9
9
8
• The growth in domestic rice output declined with
growth being negative in 1995
• The growth rate in domestic rice production is still
negative to date

13. How competitive is local rice ?
Table: Comparing price competitiveness for domestic and imported rice from selected rice mills
Mills Millers
price
N/25kg
Additional
processing
cost (25%)
N/25kg
Marketing
margin
N/25kg
Estimated
Urban
market price
N/25kg
Price of
imported
rice N/25kg
Percentage
Difference
Abakaliki 900.00 225.00 613.00 1738.00 1575.00 10.30
Adani 1018.75 254.68 431.00 1704.55 1575.00 8.23
Omor 1068.75 267.18 531.00 1866.93 1575.00 18.53
Bende 1137.5 284.37 461.00 1882.87 1575.00 19.50
Source: Field survey, 2001.
On the average an extra cost of 25 percent is needed to process domestic rice to the
quality and standards of imported rice
Improving the standards of local rice is feasible and desirable, but it may not be
competitive for local rice mills
Compounded by the issue of grading and uniform rice varieties from local farmers

14. Table International rice prices relative to domestic rice prices in Nigeria 1993 to 2001
Year Exchange
rate (N)
International
rice price
($/ton)*
Domestic
rice
(Paddy)
$/ton
Domestic
rice
(Milled)
$/ton
Prices (milled rice)
at 2002 exchange
rate (N120.96 =
US$1.00)
1993 24.67 160.29** 429.27 739.76 150.88
1994 22.00 186.12 544.09 994.55 180.88
1995 75.92 268.50 188.09 393.44 246.94
1996 80.00 234.06 323.0 566.00 374.34
1997 81.25 214.02 311.14 596.43 400.63
1998 82.75 215.16 386.1 593.35 405.91
1999 92.08 191.46 293.55 479.47 365.00
2000 100.6 142.96 265.00 436.28 362.85
2001**** 112.03 135.38 334.55 532.36 493.05
*Based on international prices for White broken rice, Thai A1 super f.o.b Bangkok
**Source http://apps2.fao.org/servlet/org.fao.waicent.ciwp.CIWPQueryServlet
***Source: PCU data Average annual market prices, 1993 t0 2000
****Source RUSEP website: www.rusep.org
How competitive is local rice ?
The table compares the domestic prices of paddy and milled rice in Nigeria with the
international prices of the worst grade rice (white broken rice, Thai A1 super, f.o.b
Bangkok). If we assume that exchange rates in Nigeria reflect market forces (which is
unlikely especially in 1993), then Nigerian domestic rice is expensive to produce
(compare paddy prices) and expensive to process (milled rice) and so cannot compete
in the international market.

15. Optimal distribution in domestic rice trade
 Domestic rice markets are
shrinking due to rice imports
 The closer the demand market
to the supply zone, the less
optimal it becomes with
increase in transport cost
 The marginal cost of non-
optimal supply of rice from
small processing mills
increases with increase in
transport cost
ABAKALI
KI
UYO
OWERRI
UMUAHI
A
ENUGU
ABA
OBOLL
O
NSUKK
A
BENIN
ONITSH
A
IKOM
OKIGWE
PORTHARCO
UT
OGOJ
A
AFIKP
O
OMO
R
ADAN
I
BEND
E
80%
16.9
%
36.9
%
45%
7.9
%
90%
69.9
%
20%
EKWULOBI
A
0.7%
0.3
%
11.1
%
29.1
%
7.9
%
8.5%
1.6%
18.5
%
5.7
%
5.8
%

16. Effect of policy Inconsistency on domestic rice production
Self sufficiency trend
0
20
40
60
80
100
120
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
Year
Percentage
PRE-BAN CRISIS BAN TARRIFF
• Pre ban period: 1960 – 1976
• Period of crisis (import license, etc) 1976 – 1985
• Period of outright ban 1986 – 1994
• Period of tariff 1995 – 2005
Domestic self sufficiency
in Nigerian rice production
was adversely affected
during the crisis years of
1977 – 1985
Self sufficiency in rice
production is still a major
challenge for Nigeria to
date

17. Conclusions
 The demand for local rice in Nigeria is far less than the
demand for imported rice
 Local rice production costs are high and uncompetitive
 Improving the post harvest quality of domestic rice is
critical but can only be achieved if production costs are
low
 Local transport costs for rice output are sticky
downwards at least in nominal terms

18. Policy Interventions
 Intensify rice production and increase on-farm yield to
reduce production costs
 Improve quality and standard of rice and reduce post
harvest losses
 Facilitate rural enterprises and businesses especially in
small mills to sustain productivity, incomes and
employment
 Strengthen human and institutional capacities to produce,
process and market rice competitively in Nigeria

19. Thank you